Snoman Logistics bets big on IKEA deal

The Swedish company, which also runs a food restaurants chain, recently forayed into India with the plan to open the first store in Hyderabad by March next year.Vishal Dutta&Saikat Das | ET Bureau | October 17, 2017, 07:55 IST

BSE-listed Snowman Logistics bagged an exclusive deal from IKEA, the global home furnishing retail major, to manage backend operations of its in-store restaurants business in India. The value of the deal was not known.

The Swedish company, which also runs a food restaurants chain, recently forayed into India with the plan to open the first store in Hyderabad by March next year.

Globally, the restaurant business accounts for 5.4% of the total revenue of IKEA whereas in India, the home furnishing giant is expecting the restaurant to contribute 10%.

“We have bagged this deal for all IKEA’s national in-store restaurants. It would be for the first time that Snowman will be providing services beyond logistics,” said Sunil Nair, CEO, Snowman Logistics. “This deal would boost our revenue by FY19.”

IKEA will set up one its largest food restaurant inside the Hyderabad store with around 1000 seats.

Currently, there are 403 IKEA stores in 49 countries with a sales volume of 38.3 billion euros.

“It is our ambition to create a one supply chain solution for our restaurants and cafés in our stories across India” said Henrik Österström, country food manager, IKEA India.

Snowman Logistics will be a long term partner and it will enable the right mix of low prices with high degree of efficiency for IKEA customers, Österström said.

Snowman will support IKEA by optimizing transportation operations (logistics), and coordinate with suppliers, under the deal. It will use integrating supply chain technologies in managing distribution network for successfully running the restaurant.

Snowman Logistics is an integrated temperature controlled logistics service provider for backend support to reputed brands like KFC, Subway, Domino’s, Café Coffee Day (CCD) and others. Currently it has network of 33 strategically located warehouses and 293 reefer vehicles.

The all-equity merger deal includes an exchange ratio of 4.39 HUL shares for each GSK Consumer India share, along with GSK entire operations of nutrition business and contract to distribute the latter's over-the-counter (OTC) and oral care brands such as Sensodyne, Eno and Crocin.